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Per Diem for IT Onshore Assignment

I'm an IT Professional currently here in the States for an 18 month assignment. I am on a Per Diem Contract meaning I'm still getting my monthly salary in the Philippines and I'm just getting an allowance during my assignment here. Below is a part of the contract I signed before coming here. XX.XX is the amount we are receiving.

"You will receive a per diem allowance of USD XX.XX per day for meals, incidentals and commuting transportation for each day that you are residing in or traveling to or from the United States. The per diem amount is subject to periodic review and my be increased or decreased by the Company in its sole discretion. Any such increases or decreases would be based on changes in costs intended to be covered by the per diem and to allow the Company to comply with U.S. tax regulations."

Few weeks ago, an argument arouse between me and the finance team. They are saying that if we will take a vacation leave, a week long vacation for example, and we are going to spend that vacation outside of the United States, we are not eligible to have the per diem. However, if we are just going to spend that vacation in other states, we are eligible.

The question from an employee perspective is how is spending your vacation in other states differs from spending your vacation outside the US or in the Philippines.

The finance team is saying that since we are not "Physically present" in the U.S. then we are not eligible for a per diem. But our assignment is not yet over and we are just on a vacation.

Below is my question on this matter.

Is this even legal? Is there a breach of contract here since the contract is saying that we should have per diem while we are residing here in the United States?